UK corporation tax
The United Kingdom is not a tax-free haven meaning that any profit that a business gets on its territory is taxable, irrespective of the formal residence and registration of the company and officers. Corporation tax is calculated based on a company tax return that a company has to file annually with the HMRC. Tax year in England runs from 6 April to 5 April the following year, and company’s financial year is linked to its incorporation date and can be changed if justified.
Corporation tax is worked out almost the same way in every country. The rate is set annually for the following year that starts on 1 April. It is charged on any profit irrespective of the amount. Main rate for 2018 is 19% and it will be reduced to 17% for the financial year beginning 1 April 2020.
A UK-based company (except for partnerships) must pay Corporation Tax on all its profits from the UK and abroad. Dormant companies do not have to pay Corporation Tax, but they have to file a Company Tax Return once they decide to make their company dormant. You must pay Corporation Tax for the reported period within 9 months following the end of your accounting period. Company’s accounting period ends on one of the following dates:
- end of the financial year covered by a company’s annual accounts;
- when a company starts or stops trading;
- when a company ceases to be tax resident;
- a company becomes dormant.
The deadline for your tax return is 12 months after the end of the accounting period it covers. You’ll have to pay a penalty if you miss the deadline. There’s a separate deadline to pay your Corporation Tax bill. It’s usually 9 months and one day after the end of the accounting period.
Minimise taxes with Imperial & Legal
Our company has been working on the English market for many year and knows a lot about its taxation system. You can trust us to provide only professional tax advice to you which can help you reduce your corporation tax in the UK and make your business more profitable. We offer individual approach and customised solutions for better results and client satisfaction.
If you have questions or you want to reduce your taxes, just call us or send us a message via an online form.